Whitewater Worries Are Gone

No one quite knows how the story got started that independent counsel Kenneth Starr was going to leave office in March. Maybe he mentioned the possibility to someone. Maybe friends floated the idea in hopes of gently nudging him back to private practice, where he would no longer be a target for the White House and media. Whatever the case, it’s April, and Starr is still going to work every day. And several people familiar with his work now say they wouldn’t be surprised if he stays through the end of 1999.

That’s not true of some of his staff. In recent weeks, there’s been a steady stream of departures among Starr’s top prosecutors. That’s widely known, but what’s not been reported is that Starr is hiring new lawyers to replace the old. Three federal prosecutors have recently joined the office. When the personnel shuffling is over, Starr’s team will be at roughly the same strength it was before extra manpower was added to deal with the Lewinsky probe. All of which means that the Whitewater office is still going strong. But there is a division of opinion-even among those most sympathetic to Starr-about whether that is a good thing.

After the Lewinsky report went to the House last September, there were some close to the office who wanted Starr to wrap up business quickly. The only cases on the plate at that time were criminal contempt charges against Susan McDougal- now being tried in Little Rock-and tax charges against Clinton crony Webster Hubbell. The Lewinsky case, at least as it applied to the president, was over, and other parts of the broader investigation-Travelgate, Filegate, large segments of Whitewater-were also complete.

But there were still other possible prosecutions. Starr’s lawyers were debating whether to go forward with another charge against Hubbell, this one a genuine Whitewater indictment, focusing on his work in the fraudulent Castle Grande land deal. And they were considering indicting Julie Hiatt Steele, who stood to become the first person to face criminal charges as a result of the Lewinsky investigation.

Unlike some of Starr’s major prosecution decisions in the past, there was no unanimity of opinion about what to do. Some people close to the office felt that since prosecutors had fulfilled their responsibility to investigate possible wrongdoing by the president, there was little reason to go on. Others believed that significant areas of investigation still remained. Ultimately, the pro- indictment forces won. In November, Starr’s grand jury indicted Hubbell on charges of fraud, making false statements, and corruptly impeding the work of federal regulators. In January, the jury indicted Steele on charges of obstruction of justice and making false statements in connection with an alleged effort to intimidate Clinton accuser Kathleen Willey.

Steele is scheduled for trial May 3, Hubbell for June 14. Both trials are guaranteed to be controversial-the Steele case because it will revive the passions of the Lewinsky investigation, the Hubbell because it will shine a spotlight on the past business practices of First Lady (and Presidential candidate) Hillary Rodham Clinton.

The Steele prosecution presents more than just a PR problem; it’s simply not an open-and-shut case. The Hubbell indictment is much stronger. The Castle Grande deal was a sham transaction intended to conceal the deep financial problems of Jim McDougal’s S&L from the federal regulators who ultimately closed it down. Hubbell is charged with lying and covering up not only his own involvement but also that of, in the words of the indictment, the “Rose Law firm’s 1985-1986 billing partner”-better known as Mrs. Clinton. Though the evidence is solid, the First Lady’s involvement could seriously complicate matters. She is mentioned- never by name-more than 30 times in the Hubbell indictment, and she will likely be called to testify.

By that time, of course, she may be on the hustings in New York. How such a trial would affect the race is anyone’s guess; while some Republicans welcome the idea of the First Lady’s unsavory business past coming back to light, others worry that it could cut in her favor. Certainly the White House script is already written: Out-of-control prosecutor revives decades-old allegations for partisan political purposes. And just for good measure, the trial may fall around the time Congress considers whether to reauthorize the independent- counsel law. Given all that, the real question may be how the trial will affect Starr.

His office is still facing two investigations of itself. Clinton’s Justice Department is itching to go after Starr for the way his prosecutors conducted the beginning of the Lewinsky probe. So far, the two sides are locked in a standoff. In addition, Starr is still waiting for the verdict of the “special master” appointed by Judge Norma Holloway Johnson to investigate the White House’s claim that Starr’s office improperly leaked secret grand-jury material last year. There have been rumors the investigator has concluded that no one on Starr’s staff broke any laws, but if anyone knows the truth on that, he’s not saying.

We do know that Starr’s prosecutors vigorously denied the leaks. Take the case of the February 6, 1998, New York Times story that recounted the president’s “We were never alone, right?” witness-coaching session with Betty Currie. Clinton lawyer David Kendall loudly accused Starr of leaking, but unsealed court papers show that Starr thinks the White House did it. Prosecutor Robert Bittman told Judge Johnson that Currie’s lawyer, Lawrence Wechsler, is a longtime friend of White House counsel Charles Ruff and that the White House legal team knew Currie’s story before the Times account was published. “There is a strong prima facie case that the president and his agents,” Starr’s brief argued, “are responsible for many of the alleged ‘leaks.'”

Even as he defended himself in the leak probe, Starr perplexed some observers last month when he announced that spokesman Charles Bakaly had abruptly resigned in connection with an investigation into another alleged leak to the New York Times. This time it was the front-page story on January 31 that said Starr’s team had concluded it might be possible to indict a sitting president. At least on the surface, Starr’s action seemed odd; the article contained no secret grand-jury material and concerned a somewhat hypothetical in-house legal analysis. But Starr lowered the boom anyway and referred the matter to the Justice Department.

So there’s still a lot going on. And there could conceivably be more, because there is always at least an outside chance of new prosecutions, and any of the already-scheduled trials could be delayed by new litigation. On top of that, Starr is required to write a final report, which will be submitted to the panel of judges who selected him. Once they approve, it will be made public. Don’t look for it anytime soon. Lawrence Walsh, the Iran-contra independent counsel, was appointed in December 1986; his final report was made public in January 1994. At that pace, Starr’s report should be at a bookstore near you sometime in early 2001.